Mezzanine and preferred equity fill the gap between senior debt and common equity in the commercial real estate capital stack. These subordinate capital positions allow borrowers to increase total leverage beyond what senior lenders provide, reducing the equity required for acquisitions, developments, and recapitalizations.
Get a Mezzanine Loan Quote →Mezzanine debt is secured by a pledge of ownership interest in the borrowing entity rather than a mortgage lien on the property, while preferred equity involves an actual equity investment with a preferred return. Both serve a similar function — increasing leverage and reducing sponsor equity requirements. These structures are commonly used for value-add acquisitions, development projects, and recapitalizations where senior lenders cap at 65-75% LTV.
Mezzanine & Preferred Equity are available for all major commercial property types. Explore financing by property category.
Mezzanine debt fills the gap between senior debt and equity in commercial real estate capital stacks. Here is when it makes sense, when it does not, and how it is structured.
Everything you need to know about mezzanine & preferred equity in Boston, including current rates, qualification requirements, capital sources, and market-specific strategies for commercial real estate borrowers.
Everything you need to know about mezzanine & preferred equity in Charlotte, including current rates, qualification requirements, capital sources, and market-specific strategies for commercial real estate borrowers.
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